Auction of 700 MHz Wireless Spectrum Ends

The Federal Communications Commission (FCC) has announced that the auction of 700 MHz wireless spectrum ended yesterday, March 18, 2008, after 261 rounds of bidding and raising a record amount of $19.6 billion. The proceeds of the auction will be deposited into the U.S. Treasury by June 30, 2008.

While the FCC has not yet announced the winning bidders, the reserve prices for four out of the five spectrum blocks up for auction were met and will be licensed for wireless broadband and telephone services. The 700 MHz spectrum is extremely valuable because it is ideal for transmitting large amounts of data over long distances. The 22 MHz block of spectrum subject to “open access” requirements met its reserve price, meaning that the winning bidder must allow customers to use any handset with the wireless network or download any wireless services they choose, provided it will not harm the network. The other spectrum blocks that met their reserve prices are expected to be licensed primarily to smaller, rural and regional carriers.

However, the FCC was unable to meet its goal of establishing a new U.S.-wide, interoperable public safety broadband network. The FCC did not receive a bid that met the reserve price for the 10 MHz D block of spectrum set aside for a partnership between a commercial entity and public safety entities, such as police, firefighters and emergency medical personnel. Rep. Edward J. Markey (D-Mass.), chairman of the House Subcommittee on Telecommunications and the Internet, called for a hearing to examine why the public safety-commercial partnership model was not successful and how the spectrum should be reauctioned. FCC Chairman Kevin Martin indicated that he would like to move quickly to hold a second auction for the D block, but it is unclear whether it will be reauctioned with the same requirements and reserve price. Under current auction rules, the FCC will not disclose the identities of the winning bidders until the D block is reauctioned. However, there is a possibility the FCC will revise or waive this rule so that the winning bidders can be announced at an earlier date.